Synthesis of glucosylceramide via glucosylceramide synthase (GCS) is a crucial event in higher eukaryotes, both for the production of complex glycosphingolipids and for regulating cellular levels of ceramide, a potent antiproliferative second messenger. In this study, we explored the dependence of the early branching eukaryote Giardia lamblia on GCS activity. Biochemical analyses revealed that the parasite has a GCS located in endoplasmic reticulum (ER) membranes that is active in proliferating and encysting trophozoites. Pharmacological inhibition of GCS induced aberrant cell division, characterized by arrest of cytokinesis, incomplete cleavage furrow formation, and consequent block of replication. Importantly, we showed that increased ceramide levels were responsible for the cytokinesis arrest. In addition, GCS inhibition resulted in prominent ultrastructural abnormalities, including accumulation of cytosolic vesicles, enlarged lysosomes, and clathrin disorganization. Moreover, anterograde trafficking of the encystations-specific protein CWP1 was severely compromised and resulted in inhibition of stage differentiation. Our results reveal novel aspects of lipid metabolism in G. lamblia and specifically highlight the vital role of GCS in regulating cell cycle progression, membrane trafficking events, and stage differentiation in this parasite. In addition, we identified ceramide as a potent bioactive molecule, underscoring the universal conservation of ceramide signaling in eukaryotes.